Preview |
PDF, English
Download (603kB) | Terms of use |
Abstract
We investigate the effects of short-term political motivations on the effectiveness of foreign aid. Specifically, we test whether the effect of aid on economic growth is reduced by the share of years a country has served on the United Nations Security Council (UNSC) in the period the aid has been committed, which provides quasi-random variation in aid. Our results show that the relationship of aid with growth is significantly lower when aid has been committed during a country’s tenure on the UNSC. We derive two conclusions from this. First, short-term political favoritism reduces growth. Second, political interest variables are inadequate as instruments for overall aid, raising doubts about a large number of results in the aid effectiveness literature.
Document type: | Working paper |
---|---|
Series Name: | Discussion Paper Series, University of Heidelberg, Department of Economics |
Volume: | 0575 |
Place of Publication: | Heidelberg |
Date Deposited: | 21 Oct 2014 09:58 |
Date: | October 2014 |
Number of Pages: | 47 |
Faculties / Institutes: | The Faculty of Economics and Social Studies > Alfred-Weber-Institut for Economics |
DDC-classification: | 330 Economics |
Uncontrolled Keywords: | aid effectiveness, economic growth, politics and aid, United Nations Security Council membership, political instruments |
Series: | Discussion Paper Series / University of Heidelberg, Department of Economics |